Millions of UK consumers are not facing up to their finances

Despite the fact that the UK continues to be in the throes of an economic crisis, 18.7million Brits are still reluctant to take charge of their financial situations.

This is according to the Scottish Widows Priorities of Life Index which revealed that the number of adults in Britain who are burying their heads in the sand rather than reviewing their budgets has gone up by 1.7milion since 2011.

8.2 million adults (16 per cent) are stretching their finances to the limit and find that they have nothing left in the pot once all their expenses, including mortgage/rent, credit card bills and food shopping have been paid. 9.8 million adults (19 per cent) have managed to claw back under £50 in disposable income after the month is out. It’s no wonder then that 4.4 million Brits are uncertain about their financial outlooks for the future.

Commenting on the situation Catherine Stewart, savings expert at Scottish Widows said: "Families are feeling the pinch as tough economic conditions continue; outgoings are increasing while income largely remains the same, as a result of pay freezes.

"The economic situation is not getting any easier, and as our purse strings are getting even tighter it is understandable that people neglect prioritising their finances, even though they are such an important aspect of our lives."

Further findings from the research revealed that 15 per cent of Brits have felt the negative effects of the economic downturn on their finances, with a further 13 per cent (6.1million) arguing that their budgets are already feeling squeezed at the start of 2012.

The spiraling cost of living and wage increases have added to the financial burden of UK households. 21 per cent said their debt mountain is too large for them to be considered financially solvent, while 33 per cent blame insufficient salary levels for their current financial crisis.

Brits have also had to hold back on the things they enjoy most with 47 per cent cutting back on luxuries and 32 per cent putting holidays on hold. Cutting down on other services, such as online home insurance, is also a recent habit that many Brits are taking in order to save money these days.

Using a prepaid card could help consumers keep a tighter rein on their finances as they can only spend what they have on their balance.